Not liable for €260m loan claims developer

Development loans of €260m were advanced to a company on securities including a guarantee of one of its directors limited to €8m, the commercial court was told yesterday.

David Kennedy, with an address in Jersey, will argue he is not liable to repay any sum on grounds including that Bank of Scotland had a 20% shareholding in the borrowing company, Dublin-registered Clancy Quay Properties Ltd, counsel for Mr Kennedy, Edward Farrelly BL, indicated.

No substantial decisions on development could be taken without the bank and actions by it had caused losses, counsel said. The bank, for example, reneged on the building of a school and also refused to let the company proceed with €26m worth of closed contracts, he said.

Mr Justice Peter Kelly agreed to an application by Kelley Smith, for Bank of Scotland, to fast-track its action against Mr Kennedy in the commercial court.

Bank of Scotland, acting as security trustee on loans of €260m advanced by Bank of Scotland Ireland and National Irish Bank to Clancy Quay Properties, is seeking summary judgment orders for €8m against Mr Kennedy.

The loans were advanced for purchase and development of a mixed- use development on a site at Clancy Barracks, Inchicore, Dublin, over which receivers have been appointed by the bank.

The judge said, while the borrowings were €260m, the 2007 guarantee of Mr Kennedy was limited to €8m. It seemed to be suggested if the bank was writing off €260m, that should include the €8m, he noted.

Mr Justice Kelly said he would allow Mr Kennedy three weeks to outline on affidavit the issues being raised and would fix the summary judgment application for hearing on Jul 31. Source: Irish Examiner